LabourGreen power policy already costly

. . . Numerous factors combined to force down the price of Meridian shares. Chief among these were market fears that a Labour-Greens government, if elected next year, will gut electricity company profits to deliver large price cuts; and ongoing uncertainty about the long term future of the Tiwai Point aluminium smelter. . .

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8 Responses to LabourGreen power policy already costly

According to Mr English, who isn’t disappointed, the lack of interest proves that the energy companies aren’t making big profits by fleecing consumers. No it doesn’t. The share price and volume of sales reflects the perceptions of purchasers as to future profits. It suggests that those who buy shares expect Labour and the Greens will be the next government and that Rio Tinto won’t stick around even after the 30million corporate welfare handout.

The thinking supporting the purchases is the shares are a long term hold and I will build up a bigger stake over time. Returns will be lower than more speculative stocks but more predictable. If you want capital gain buy something else.

At a personal level, I am happy that I got the shares for the price I did, but if you stand back and look at the asset sale from a broader perspective what the Green Taliban and Labour did it is in truth economic terrorism designed to defeat a policy the Nats openly campaigned on in 2011.

I/S nails it:
“Oh dear. After all their efforts to make it a success – a rock-bottom price, payment on installment, propping up a major customer with a government subsidy, and guaranteed high dividends from oligopoly rents – the Meridian privatisation has turned into a spectacular failure, attracting only 62,000 investors. That’s fewer than voted for ACT in 2008. I guess people have learned their lesson from the Mighty River Power fiasco, where investors got badly burned and have already lost 10% of their money.

And naturally, it’s all Labour’s fault. So much for the party of personal responsibility…

That 62,000 BTW is ~1.4% of the population. That’s who National represents – a tiny elite of the rich. The other 98.6% of us get to have our assets sold off at a loss and our public services cut for the benefit of this tiny clique of National cronies. Time to vote them out, and get a government which actually represents the people of New Zealand.”

I/S first name says it all. Where do you think the money is going and why do we need to sell the assets again? Because of stupid spending by socialist governments like subsidising employers to pay their employees less.

It’s not as simple as red Russel thinks. You can’t just roll out the printing presses – the money has to come from somewhere. New Zealand is like the overspending family that has to sell the home before the mortgage swallows the lot.